Tying health insurance benefits directly to employment is forcing most Americans to work longer than they would have otherwise, a new study from the Employee Benefits Research Institute finds.
According to the study’s results, nearly 20 percent of retired Americans ended up working longer than they initially planned because they didn’t want to lose access to their employer-based health benefits. And a majority of the Americans who are currently in the workforce are also planning to delay their retirement in order to keep the insurance plans they have through their employer:
This builds upon previous research that shows the Great Recession has seriously impacted older Americans’ ability to retire. An estimated 62 percent of working Americans now report they’re planning to put off their retirement — up from 42 percent in 2010 — largely due to job losses and financial insecurity. These issues go hand-in-hand particularly because, as health care costs continue to rise, Americans are increasingly worried about being able to afford their insurance coverage.
And the United States’ primarily employer-based health insurance system doesn’t just impact Americans’ retirement decisions. It has also contributed to the “job lock” phenomenon, which prevents Americans from switching jobs or changing career paths because they’re too worried about losing access to their health benefits. “Job lock” ultimately creates an inefficient labor market, since workers may not take better jobs because they’re concerned about having a gap in health coverage.
Fortunately, Obamacare will take steps to address these dynamics by making health care more affordable to low- and middle-income Americans, as well as preventing insurers from denying coverage to people with pre-existing conditions. The health reform law “completely changes the playing field,” one of the study’s authors told Wonkblog’s Sarah Kliff. “If everything goes as planned, you’ve got guaranteed issue next year. You don’t need the employer to fill the gap.”